Wall Street advances as debt, energy concerns abate

Markets have been buffeted in recent weeks by worries about an energy crisis, elevated inflation and reduced stimulus.

The prospect of a short-term United States debt limit extension is easing concerns over political bickering [File: Stefani Reynolds/Bloomberg]

U.S. equities rose on Thursday, bolstered by progress on U.S. debt-ceiling talks and easing concerns about Europe’s energy crunch.

The S&P 500 climbed as much as 1.5% before fading on news China plans to tighten its supervision over technology companies. The gains were led by the materials and consumer discretionary sectors, putting the benchmark index on track for its best three-day advance since July. The yield on the U.S. 10-year Treasury note rose to 1.57%, the highest since June.

“We’ve had a 24-hour stretch where we’ve pulled back from a few of the key risk drivers that have been concerning markets,” said Giorgio Caputo, senior portfolio manager at J O Hambro Capital Management.

Markets have been buffeted in the past month by worries about an energy crisis, elevated inflation, reduced stimulus and slower growth. However, the prospect of a short-term U.S. debt limit extension is easing concern over political bickering. Natural gas prices were also lower on Thursday after signals Russia may increase supplies to Europe.

“The volatility we’ve seen in the markets here this week — where we’re up one day, down the next — is really a reflection of the news cycles and the different news that we’ve been receiving,” Chris Gaffney, president of world markets at TIAA Bank, said by phone.

Up next, all eyes will be on Friday’s U.S. nonfarm payrolls, which may shed light on the the Federal Reserve’s timeline to cut bond purchases. There is growing optimism the report will show the kind of “decent” jobs growth Fed Chair Jerome Powell said he wants. U.S. initial jobless claims fell more than expected last week and ADP employment figures beat expectations for September.

“Both really reflect that the job market is strengthening and that people are getting back to work,” Gaffney said of the latest employment data. “That certainly bodes well for the markets going forward in that the more people that are working, the more spending can occur as people get back to work.”

Oil reversed losses after the U.S. Energy Department said it has no plans to tap oil reserves. The dollar was little changed. Gold fell.

For more market analysis, read our MLIV blog.

Here are some events to watch this week:

Reserve Bank of India monetary policy decision on Friday
The U.S. Labor Department releases unemployment and job creation data Friday
Some of the main moves in markets:

Stocks

  • The S&P 500 rose 1.1% as of 3:29 p.m. New York time
  • The Nasdaq 100 rose 1.2%
  • The Dow Jones Industrial Average rose 1.2%
  • The MSCI World index rose 1.3%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.1553
  • The British pound rose 0.3% to $1.3619
  • The Japanese yen fell 0.2% to 111.63 per dollar

Bonds

  • The yield on 10-year Treasuries advanced five basis points to 1.57%
  • Germany’s 10-year yield was little changed at -0.19%
  • Britain’s 10-year yield was little changed at 1.08%

Commodities

  • West Texas Intermediate crude rose 1.3% to $78.77 a barrel
  • Gold futures fell 0.3% to $1,756.30 an ounce
Source: Bloomberg

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